Disqualification of Directors

A liquidator or an administrator has a duty to file a return with the Insolvency Service for each person that has acted as a director of a company in the three years before the company was placed into liquidation/administration.  The Insolvency Service will then decide whether there is sufficient evidence of wrongdoing or reckless behaviour to warrant a disqualification. Examples of this type of behaviour might include:  

  • Trading whilst insolvent so that a company continues to trade when the directors should have known that it could not meet its liabilities as and when they fall due.
  • Not maintaining proper accounting records so that the directors are able to establish the true trading position of the company at any time. 
  • Failing to file accounts at Companies House
  • Using tax (PAYE, VAT, corporation tax and others) to fund the company by failing to pay the tax over to HM Revenue and Customs.  
  • Misappropriating the company’s money for personal use. 

Please note that the above is provided for illustration purposes only and comprises a short view of extremely complex insolvency and other legislation. This is a complicated area and specific advice must be sought before undertaking any course of action or before refraining from any course of action. Gore and Company takes no responsibility for any loss incurred to or by any person who either acts or refrains from acting on the basis of the above or of any other item published on this website. The above note may not be reproduced without the prior written consent of Gore and Company.

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